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Capitalization of expenses

AS 1440 views 7 replies

Hello Everybody,

 

Is Purchase of hard disk for systems can be capitalized ?

Replies (7)

If hard disk is capable of improving the capacity of the system then it should be capitalised....else it is just another repais and maintenence and should be charged to revenue...

Is ur query cleared???

the basic function of Hard Disk is it increases the storing capacity of the System and in return i think it increases the eficiency of the system.

so may be it should be capitalized, still Confused!!!!!!

 

Yes u r correct.....

Any expenditure that increases the efficiency of an asset should always be capitalised...

hard is categorised under computer peripherals subject to depreciation @ 60% uner icome tax act..accordingly it should be capitalised

If you are an IT (selling), it will be purchase account it will not involve in the capital. Apart from IT Co.,, It will be capitalized. It means Office equipment assets value will be increased.


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